Understanding the Critical Role of a Credit Analyst Job Description
A credit analyst determines if individuals and businesses should receive credit through financial statement analysis and credit evaluation. Learn key Credit Analyst Job Description, responsibilities, requirements, and takeaways.
What Does a Credit Analyst Do?
A credit analyst is responsible for:
- Assessing the creditworthiness of potential customers or clients before a company extends credit or loans
- Analyzing financial statements, credit reports, and other data to evaluate risk
- Determining if individuals and businesses should receive credit
- Recommending appropriate credit limits based on risk
Key Credit Analyst Responsibilities
- Review loan and credit applications to evaluate customer financial information
- Pull credit reports and credit scores to verify the applicant’s financial history
- Analyze applicant financial statements using ratio analysis to evaluate debt capacity
- Create formatted reports on creditworthiness analysis and recommendations
- Develop financial models projecting the applicant’s ability to repay
- Present findings to loan committees with credit limit recommendations
- Monitor customer accounts and financial conditions post-approval
- Adjust customer credit limits based on changing risk profiles
- Report on lending portfolio metrics and trends to senior management
Critical Skills and Requirements
- Bachelor’s degree in finance, accounting or a related quantitative field
- Strong analytical and critical thinking abilities
- Excellent written and verbal communication skills
- High attention to detail and accuracy
- Proficiency with spreadsheet and financial modelling software
- Knowledge of lending practices, credit regulations and credit-scoring metrics
- Ability to make sound credit decisions
Key Takeaways as a Credit Analyst
- Assess creditworthiness through analysis of financial statements and credit reports
- Make recommendations on whether credit should be extended based on risk
- Strong finance, accounting, math and analytical capabilities required
- Communication and presentation are critical for credit committee reports
Credit Analyst Job Description Template
Title: Credit Analyst
The credit analyst is responsible for analyzing the financial histories and statements of individuals and businesses applying for loans or lines of credit. The credit analyst determines risk levels and makes recommendations for lending decisions.
Roles and Responsibilities
- Review lending applications and evaluate customer financial information
- Pull credit history reports and verify applicant backgrounds
- Perform analysis on financial statements using ratio calculations and trend analysis
- Build financial models in Excel to estimate debt capacity, cash flows, and ability to repay credit
- Write credit summary reports with risk assessments and recommendations to approve or decline credit
- Present findings and recommendations to loan review committees
- Monitor customer financial conditions post-approval
- Recommend adjustments to credit limits based on changing risk factors
- Track lending portfolio metrics and report trends to management
- Comply with all lending regulations, policies, risk and ethical standards
Required Skills and Qualifications
- Bachelor’s degree in Finance, Accounting or a related field
- 2+ years experience in lending, credit analysis or related banking role
- Advanced proficiency with Microsoft Excel and financial modeling
- Understanding of loan documentation and credit evaluation metrics
- Strong analytic, critical thinking and problem-solving skills
- Ability to synthesize complex financial information quickly and accurately
- Excellent written and oral communication abilities
- Outstanding organization, attention to detail and time management
What does a credit analyst do?
A credit analyst determines the creditworthiness and risk levels of potential customers by analyzing their financial statements, credit reports, and financial histories before making lending decisions. Their role is to evaluate if individuals or businesses qualify for credit or loans.
What skills and experience are required to be a credit analyst?
Most credit analyst roles require a bachelor’s degree in finance, accounting, or a related quantitative field. Strong analytical skills, financial modelling proficiency, and 2+ years of experience in banking or lending is also typically preferred by most employers.
What tools does a credit analyst use?
Credit analysts rely heavily on spreadsheet software like Excel to create formatted reports for credit recommendations. They build financial models projecting cash flows, the ability to pay, and analyze metrics to determine risk. Familiarity with financial databases and data analysis tools is also important.
How does a credit analyst determine risk levels?
By reviewing factors like income levels, credit scores, payment history, and debt-to-income ratios and assessing trends over time through historical financial statements. Industry standards and credit risk modelling best practices are applied to estimate default probability.
What reporting does a credit analyst do?
Credit analysts are responsible for preparing reports for loan committee reviews summarizing applicant financials, key risk metrics, analysis completed, and final recommendations on whether credit should be approved along with suitable lending amounts.
What career advancement opportunities exist?
With additional experience, credit analysts may progress into senior credit analysts, team leaders, or credit risk management roles with greater influence on lending policies and credit decision authority.